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Veteran

...by buying dollars and simply putting in a new order at the printing press to pay for them in pesos. the peso should be 2.1-2.3 against the dollar, which it will be when kirchner finally lets the currency float freely possibly after the next election but probably later next year. in the meantime, inflation will continue to bomb along at 9-30% (depending on who you believe-kirchner's cronies at Indek or your wallet when you go to the shops).

Member

thanks grazie...tourists to blame for inflation in argentina? absurd. it's the 3-1 policy (and the obvious economic growth since the crisis putting more money into people's pockets) that's driving inflation. tourists are just taking advantage of a false and weak exchange rate.

Veteran

thanks grazie...tourists to blame for inflation in argentina? absurd. it's the 3-1 policy (and the obvious economic growth since the crisis putting more money into people's pockets) that's driving inflation. tourists are just taking advantage of a false and weak exchange rate.

Veteran

I read nothing about the over or undervalue of the peso.
There is no indication to predict the peso should be 2,3. 3,5 is more likely.
The only one who talk about 2,3 are government officials or people who depend on the same government. But that´s the same government that tampers with figures as much as it want, so that should say something about there creditibility.

Member

yawn..."Nipping inflation in the bud would require a rise in interest rates and curbs on public spending, as well as letting the peso appreciate."

this is my last response to you, pal. your clear ignorance of basic economics is forgivable but your persistant heckling and refusal to accept opinions that don't concur with your twisted version of the truth is not.

Veteran

yawn..."Nipping inflation in the bud would require a rise in interest rates and curbs on public spending, as well as letting the peso appreciate."

this is my last response to you, pal. your clear ignorance of basic economics is forgivable but your persistant heckling and refusal to accept opinions that don't concur with your twisted version of the truth is not.

Newcomer

This is a March '07 report from Morgan Stanley regarding the Indec scandel...
"We don’t want to overplay the recent turmoil over
inflation measurements in Argentina. Ultimately both the
administration and the central bank recognize that inflation is
too high and needs to be brought down. Moreover, there is
intense effort to control expectations and a careful focus on
wage negotiations taking place this year, which should yield
increases below those of last year. And all of this comes as
the administration wisely remains focused on avoiding the
traditional fiscal habit of living beyond one’s means.
But we are concerned that the relative nonchalance among
market participants to the INDEC affair could be misread by
the authorities as a sign of endorsement of the policy. After
all, Argentine instruments sold off only modestly in the
aftermath of the INDEC affair. In a world with an abundance
of risk appetite, we would warn not to construe near-term
acceptance by investors as a sign of sound macro policy.
The accusation that inflation is being made-to-measure can
have dire effects on the ability of the authorities to conduct
fiscal, monetary and wage policy making each more costly.
While we are not willing to label the inflation credibility scandal
as a “tipping point” quite yet, we are afraid that it could
emerge as a greater problem before the year is out."

Veteran

This is a March '07 report from Morgan Stanley regarding the Indec scandel...
"We don’t want to overplay the recent turmoil over
inflation measurements in Argentina. Ultimately both the
administration and the central bank recognize that inflation is
too high and needs to be brought down. Moreover, there is
intense effort to control expectations and a careful focus on
wage negotiations taking place this year, which should yield
increases below those of last year. And all of this comes as
the administration wisely remains focused on avoiding the
traditional fiscal habit of living beyond one’s means.
But we are concerned that the relative nonchalance among
market participants to the INDEC affair could be misread by
the authorities as a sign of endorsement of the policy. After
all, Argentine instruments sold off only modestly in the
aftermath of the INDEC affair. In a world with an abundance
of risk appetite, we would warn not to construe near-term
acceptance by investors as a sign of sound macro policy.
The accusation that inflation is being made-to-measure can
have dire effects on the ability of the authorities to conduct
fiscal, monetary and wage policy making each more costly.
While we are not willing to label the inflation credibility scandal
as a “tipping point” quite yet, we are afraid that it could
emerge as a greater problem before the year is out."

Registered

...by buying dollars and simply putting in a new order at the printing press to pay for them in pesos. the peso should be 2.1-2.3 against the dollar, which it will be when kirchner finally lets the currency float freely possibly after the next election but probably later next year. in the meantime, inflation will continue to bomb along at 9-30% (depending on who you believe-kirchner's cronies at Indek or your wallet when you go to the shops).

Well said. However, it's not Argentina alone that's doing this. Central banks across the globe are propping up the dollar by buying it and paying for it with fiat currency that they print. In other words, the US current account and fiscal deficits are pushing up inflation worldwide. Everyone is afraid of what will happen to the world economy if the dollar plummets.